Tobacco companies foot the bill on last-minute display changes

Retailer Ritesh Patel says the new tobacco regulations would make 'a little bit' of a difference to tobacco sales, but not much. Photo / APNZ

Tobacco companies are footing the bill for last-minute changes to tobacco cabinets in dairies, ahead of a ban on retail displays this month.

New regulations, introduced under a law passed last year, will require all retailers to ensure tobacco products are hidden from view by July 23.

Retailers will also be banned from referring to the sale of tobacco products in their trading names.

Associate Health Minister Tariana Turia, who is behind the ban, last year said the law change would remove the "loophole" of tobacco displays.

"Retail displays, innocently positioned alongside everyday confectionary and sweets, are a key component of making cigarettes attractive to recruit young smokers. We're not going to tolerate this any longer."

With less than two weeks before the ban comes into force, some independent retailers have not yet made any changes - and are relying on tobacco companies to pay for modifications to their shop displays.

Kirby's Candies manager Ritesh Patel, whose confectionary store is in a prime retail spot on Wellington's Lambton Quay, said the cabinet behind his counter would have new doors installed by a tobacco supplier this week.

He expected the new regulations would make "a little bit" of a difference to tobacco sales, but not much.

Mr Patel said his regular customers already knew which brand they wanted, while others sometimes asked for the cheapest brand.

The manager of another central Wellington retailer, who did not wish to be named, said changes to his roller-door tobacco display this week would also be paid for by a tobacco supplier.

He had been well-informed about the new regulations and expected the impact on sales would be minimal.

"I can't see it making much difference."

British American Tobacco New Zealand spokesman Nick Booth said retailers were ultimately responsible for compliance with the new regulations.

He said trade and marketing representatives had been helping retailers prepare for the display ban by dropping off pamphlets and suggesting steps on how to comply.

"On a case-by-case basis, we have been assisting some of our retailers with the installation of self-closing doors on their equipment," Mr Booth said.

"We are picking up the tab as part of our contractual obligations."

Mr Booth said the company did not expect any direct impact on sales, based on experience in other countries.

Imperial Tobacco spokeswoman Cathy Edwards said the company had paid for modifications to the display units it provided to retailers.

The work involved preparing the display units for new doors, which had already been supplied to retailers.

"So literally the day before the display ban, to make sure that the retailers are compliant, they just basically pick up the doors, hook them on, and it's done in a matter of minutes."

Ms Edwards said display bans overseas had led to an initial drop in sales, but after consumers adjusted to the changes there was "no real impact".

Philip Morris corporate affairs manager Chris Bishop said the company had provided information to retailers to support them through the "impractical change to their business".

He said the effectiveness of display bans in reducing smoking had not been established and there was no evidence it had reduced youth smoking rates overseas.

"But it is clear that display bans impede competition and impose significant costs and other burdens on retailers," he said.

"Having to store and manage tobacco products behind closed doors means time and effort, angry customers, and, especially for smaller shops, lost sales to larger competitors who can afford to manage the more complex retail environment."

Countdown strategy and corporate affairs general manager Richard Manaton said extensive work had been done to ensure tobacco cabinets and canisters at its supermarkets were in compliance. Changes to signage had also been made.

The company had footed the bill for the changes itself.

Mr Manaton said it was "too early to tell" what impact the changes would have on sales.

Foodstuffs communications director Antoinette Shallue said its stores - which include New World, Pak'N'Save and Four Square - were working hard to make the required changes in time.

"This includes working with the tobacco suppliers to make sure product visibility and the cabinets adhere to the new regulations."

Ms Shallue said tobacco products were not prominently displayed at most supermarkets, so "the change is probably less significant than you might see with some of the smaller retailers like dairies and things."

The law that introduced the display ban also allows enforcement officers to instantly fine retailers $1000 for selling tobacco to people aged under 18.

It also increases the maximum penalty for selling tobacco to underage people from $2000 to $10,000.